SAIC would be the first Chinese automaker to Make in India
SAIC Motor Corporation is among the 222 Chinese stocks that are a part of the MSCI’s simulated list of constituents for inclusion into its Emerging Markets Index (EEM) (VWO), in 2018. SAIC, China’s (FXI) (YINN) (MCHI) largest automaker (by sales volume) is getting ready to grab a share of the India automobile market, shifting select manufacturing activity to the country. The company will be well positioned to grab a share of the automotive market in India, which is projected to become the third largest in the world by 2020. State-owned SAIC would be the first Chinese auto firm to enter India (EPI) (INDA).
|Security Name||Ticker||Mkt Cap ($bn)||Fwd EPS||Fwd P/E||Analyst Rating||Sector- Industry||YTD Return|
|SAIC Motor Corporation Limited A||600104||359.03||3.15||9.4||4.3||Consumer Discretionary- Automobiles||31.3%|
|Data as of date June 19, 2017, Returns as of July 3|
To commence operations in 2019
According to a statement released by the company on June 28th, the company would commence operations in 2019 with a fully-owned car plant. SAIC has already established an India subsidiary, MG Motor India. With this, the company would bring its MG brand into the South Asian (AAXJ) (VPL) economy. The company has also roped in a former General Motors (GM) top executive as the president and managing director of its subsidiary.
The Shenzhen-listed stock 600104 is up 31.3% YTD (as of July 3). Over a 5-year period, however, the stock has returned 25.5% on average. On a relative basis, its blended forward P/E stands at 9.4x, while the mean of blended forward P/E’s of its competitor group (including SAIC Motor Corp) equals 7.8x. The company’s presence in the Fortune Global 500 list warrants the premium that it commands over peers.
Consensus analyst ratings hold the company at a 4.35 score with 69.6% of analysts with a BUY recommendation, and 30.4% with a HOLD recommendation.